JUDGMENT OF THE COURT OF FIRST INSTANCE (First Chamber) 13 January 2004 *

Transcription

1 JUDGMENT OF CASE T-67/01 JUDGMENT OF THE COURT OF FIRST INSTANCE (First Chamber) 13 January 2004 * In Case T-67/01, JCB Service, established in Rocester, Staffordshire (United Kingdom), represented by R. Fowler, QC, R. Anderson, barrister, L. Carstensen, solicitor, and initially by M. Israel, and, subsequently, by S. Smith, solicitors, with an address for service in Luxembourg, applicant, v Commission of the European Communities, represented by A. Whelan and S. Rating, acting as Agents, with an address for service in Luxembourg, defendant, APPLICATION, as a principal claim, for annulment of Commission Decision 2002/190/EC of 21 December 2000 relating to a proceeding under Article 81 of the EC Treaty (Case COMP.F.1/ JCB) (OJ 2002 L 69, p. 1), and, in the alternative, for partial annulment of that decision and corresponding reduction of the fine imposed on JCB Service, * Language of the case: English. II-56

2 JCB SERVICE v COMMISSION THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (First Chamber), composed of: B. Vesterdorf, President, J. Azizi and H. Legal, Judges, Registrar: J. Plingers, Administrator, having regard to the written procedure and further to the hearing on 22 January 2003, gives the following Judgment Legal background 1 Article 81 of the EC Treaty provides: '1. The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which: (a) directly or indirectly fix purchase or selling prices or any other trading conditions; II - 57

3 JUDGMENT OF CASE T-67/01 (b) limit or control production, markets, technical development, or investment; (c) share markets or sources of supply; (d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts. 2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void. 3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of: any agreement or category of agreements between undertakings; II-58 any decision or category of decisions by associations of undertakings;

4 JCB SERVICE v COMMISSION any concerted practice or category of concerted practices, which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not: (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.' 2 Article 15, relating to fines, of Regulation No 17 of the Council of 6 February 1962, First Regulation implementing Articles [81] and [82] of the Treaty (OJ, English Special Edition , p. 87) provides: ' The Commission may by decision impose on undertakings or associations of undertakings fines of from to units of account, or a sum in excess thereof but not exceeding 10 % of the turnover in the preceding business II - 59

5 JUDGMENT OF CASE T-67/01 year of each of the undertakings participating in the infringement where, either intentionally or negligently: (a) they infringe Article [81](1) or Article [82] of the Treaty, or (b) they commit a breach of any obligation imposed pursuant to Article 8(1). In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement. 5. The fines provided for in paragraph 2(a) shall not be imposed in respect of acts taking place: (a) after notification to the Commission and before its decision in application of Article [81](3) of the Treaty, provided they fall within the limits of the activity described in the notification...' II-60

6 Facts and administrative procedure JCB SERVICE v COMMISSION 3 JCB Service is a company incorporated under English law and set up in 1956 by Joseph Cyril Bamford with its registered office in Rocester, Staffordshire (United Kingdom). JCB Service is held by Transmissions and Engineering Services Netherlands BV and owns and controls directly or indirectly the companies of the JCB Group ('JCB'), which comprises 28 companies, including inter alia JCBamford Excavators, JCB Sales, JCB SA, JCB Germany and JCB Spain. JCB manufactures and markets construction site machinery, earthmoving and construction equipment and agricultural machinery as well as the spare parts for those various products. 4 JCB had a turnover of EUR million in 2000 for construction equipment and ranked fifth among manufacturers worldwide; it exports more than 70 % of its production through a network of more than 400 distributors and agents. Caterpillar is its highest-ranking competitor, with a turnover of EUR million. JCB estimates its market share for construction and earthmoving equipment at 8.5 % in Europe and 4.4 % worldwide. In 1995 and 1996, JCB had a market share of 13 to 14 % in volume (8.9 % in value) of all construction and earthmoving machines sold in the Community (36.8 % in volume and 23.7 % in value in the United Kingdom). Backhoe loaders are the group's leading product, in which JCB had a market share of more than 23 % in value worldwide and nearly 60 % in the United Kingdom in JCB's distribution network is structured on a national basis with one subsidiary per country (in Germany, Belgium, Spain, France, Holland and Italy) or one exclusive importer. 6 Two companies in the JCB Group notified the Commission in 1973, using form A/B drawn up pursuant to Regulation No 17, of eight standard distribution II - 61

7 JUDGMENT OF CASE T-67/01 agreements for JCB products, to be concluded with the distributors or main dealers linked to the group, five of which concerned countries in the common market, namely the United Kingdom (including the Channel Isles) and Ireland (notified by JCB Sales) and Germany, Benelux, Denmark and Italy (notified by JCBamford Excavators). The agreements were registered by the Commission's departments on 30 June The Commission (Directorate-General (DG) for Competition) informed JCB Sales, by letter of 27 October 1975, that the agreements notified entailed several restrictions in breach of the provisions of Article 85 of the EC Treaty (now Article 81 EC). It required their amendment and put various questions to the company. The Commission focused on the five agreements concerning the common market, stating that the other three did not seem likely to affect trade between the Member States. 8 Revised standard agreements concerning JCB Sales and applicable in the United Kingdom and Ireland (the Distributor Agreement-Export, the UK Distributor Agreement and the UK Main Dealer Agreement) were sent to the Commission on 18 December By letter of 13 January 1976, the Commission acknowledged receipt of those new versions, informed JCB Sales that certain problems previously raised had been resolved while others remained and sought clarification of several provisions. 10 JCB Sales answered those points by letter of 11 March 1976 and provided detailed information regarding the remaining problems alleged to exist by the Commission in its letter of 13 January II-62

8 JCB SERVICE v COMMISSION 11 Subsequently, there were no developments on the JCB notification file until On 6 March 1980, JCB Sales sent the Commission the standard UK Distributor Agreement replacing the agreement notified in 1975, which had expired, and, according to the applicant, containing only minor changes. On its expiry, JCB Sales sent the Commission the agreement which replaced the 1980 agreement by letter of 29 December The Commission did not reply to the letters sent by JCB in 1980 and A judgment of the Tribunal de Commerce de Paris (Commercial Court, Paris) of 11 December 1995 partially dismissed the action for unfair competition brought on 28 November 1990 by JCB's subsidiary in France, JCB SA, as exclusive importer of JCB products in France, against Central Parts SA, which obtained JCB spare parts from the United Kingdom in order to resell them in France. JCB SA had accused Central Parts of using the JCB sign and the description 'distributeur agrée' (authorised distributor) unlawfully. 14 On 15 February 1996, Central Parts lodged a complaint with the Commission about the commercial practices of 'JCB Grande Bretagne' in relation to the distribution of its products. 15 On 5 November 1996 the Commission undertook an inspection at the premises of JCB SA, and of two of its distributors in the United Kingdom, Gunn JCB Ltd and Watling JCB Ltd. II - 63

9 JUDGMENT OF CASE T-67/01 16 On 24 March 1998, the Commission sent a first statement of objections to JCBamford Excavators overlooking the relevance of the notification sent in 1973 (see paragraph 6 above). JCB pointed out that omission on 6 July 1998 in its written observations in response to the statement of objections and again at its hearing by the Commission's departments on 16 October In the meantime, on 8 April 1998, the Cour d'appel de Paris (Court of Appeal, Paris) delivered a judgment overturning the judgment of the Tribunal de commerce de Paris of 11 December 1995, holding that Central Parts had engaged in unfair competition with JCB SA. 18 A second statement of objections taking account of the 1973 notification was sent to JCB Service (JCBamford Excavators) on 30 July 1999, to which JCBamford Excavators replied on 13 December JCBamford Excavators was heard again on 16 January In the course of the administrative procedure, JCB had access to its file, at its request, three times, on 24 April 1998, 22 October 1999 and 16 May 2000, with the exception of documents deemed by the Commission to be non-accessible, a classification confirmed by the Hearing Officer acting in the internal procedure for processing requests for access to files laid down by the Commission Notice on the internal rules of procedure for processing requests for access to the file in cases pursuant to Articles [81] and [82] of the EC Treaty, Articles 65 and 66 of the ECSC Treaty and Council Regulation (EEC) No 4064/89 (OJ 1997 C 23, p. 3). II-64

10 JOB SERVICE v COMMISSION 20 On 21 December 2000 the Commission adopted Decision 2002/190/EC of 21 December 2000 relating to a proceeding under Article 81 of the EC Treaty (Case COMP.F.1/ JCB) (OJ 2002 L 69, p. 1, 'the contested decision'), Article 1 of which reads as follows: 'JCB Service and its subsidiaries have infringed Article 81 of the Treaty by entering into agreements or concerted practices with authorised distributors, the object of which is to restrict competition within the common market in order to partition national markets and provide absolute protection in exclusive territories outside which authorised distributors are prevented from making active sales and which include the following: (a) restrictions on passive sales by authorised distributors in the United Kingdom, Ireland, France and Italy, which include sales to unauthorised distributors, end-users or authorised distributors located outside exclusive territories and, in particular, in other Member States; (b) restrictions on sources of supply regarding purchases of contract goods by authorised distributors located in France and Italy, which prevent crosssupplies between distributors; (c) fixing of discounts or resale prices applicable by authorised distributors in the United Kingdom and France; (d) imposition of service support fees on sales to other Member States effected by authorised distributors outside exclusive territories in the United Kingdom on II - 65

11 JUDGMENT OF CASE T-67/01 the initiative of and according to fixed scales set forth by JCBamford Excavators Ltd or other subsidiaries of JCB Service, thereby making distributors' remuneration dependent on the geographic destination of sales; (e) withdrawal of allowances depending on whether sales in the United Kingdom are made within or outside exclusive territories or whether authorised distributors, in the territory of whom contractual products are used, reach an agreement with authorised selling distributors, thereby making distributors' remuneration dependent on the geographic destination of sales.' 21 Article 2 of the contested decision rejects the application for exemption submitted by JCBamford Excavators on 30 June Article 3 orders JCB Service and its subsidiaries to bring to an end the infringements established and Article 4 imposes a fine of EUR on JCB Service in respect of those infringements. Pre-litigation procedure and forms of order sought 22 By application lodged at the Registry of the Court of First Instance on 22 March 2001 JCB Service brought the present action under Article 230 EC for annulment of the contested decision. 23 By a separate document, lodged the same day, the applicant brought an application under Articles 242 EC and 243 EC for suspension of operation of Articles 1(d), 2 and 3(a) to (f) of the contested decision, and, in the alternative, for such further or other relief as the Court considered just and appropriate. Those II-66

12 JOB SERVICE v COMMISSION proceedings, registered as Case T-67/01 R, were concluded by an order for removal from the register of 10 May 2001, once the applicant had declared itself satisfied, at the hearing of 8 May 2001, with the explanations given by the Commission regarding the interpretation of the operative part of the contested decision. 24 By another document, also lodged on 22 March 2001, JCB Service asked the Court to order measures of organisation of procedure and/or measures of inquiry under Articles 64 and 65 of the Rules of Procedure of the Court of First Instance, to the effect that the Commission provide it with the documents it had numbered 1 to 19 to which it did not have access during the administrative procedure. 25 The applicant claims that the Court should: as its principal claim, annul the contested decision; in the alternative, annul the contested decision in part and reduce the fine imposed accordingly; order the Commission to provide it with copies of documents on the file declared not communicable, any document in existence recording telephone or other contact, and all other documents or information not disclosed to the applicant; II - 67

13 JUDGMENT OF CASE T-67/01 order the Commission to pay the costs. 26 The Commission contends that the Court should: dismiss the action in its entirety; and order the applicant to pay the costs. 27 By a measure of organisation of procedure notified on 18 November 2002, the Court of First Instance asked the Commission to produce confidential and non-confidential versions of the documents on the file not disclosed to JCB during the administrative procedure and numbered 14 to 19 in the applicant's list, to indicate the method used to determine the amount of the fine, providing data to enable a comparison to be made with similar cases, and to reply to the complaint that there is a contradiction in the operative part of the decision. 28 On 4 December 2002, the Commission sent the Court of First Instance non-confidential versions of the documents requested and answered the questions put. 29 The parties presented oral argument and replied to the questions put to them orally by the Court at the hearing on 22 January II-68

14 JCB SERVICE v COMMISSION 30 On the day of the hearing the Commission produced to the Court the confidential versions of documents Nos 14 to 19 to allow the court to assess whether confidentiality had been opposed justifiably. Further, it was decided at the hearing that the Commission should disclose to the Court and to JCB's counsel documents Nos 1 to 13. The Commission made the disclosure requested and the applicant's counsel submitted written observations on all the documents on 13 February Law 31 The application contains pleas relating to the procedure by which JCB Service alleges that the Commission, throughout the procedure under Article 81 EC, breached essential procedural requirements and disregarded the fundamental rights of the defence. It also contains pleas concerning the merits of the contested decision. 1. The procedure The first plea: the Commission 's failure to act within a reasonable period Arguments of the parties 32 JCB submits that the Commission failed to fulfil its obligation to act within a reasonable time which derives both from a general principle of Community law enshrined in the case-law and from Article 6(1) of the European Convention fol II - 69

15 JUDGMENT OF CASE T-67/01 the Protection of Human Rights and Fundamental Freedoms (ECHR), signed in Rome on 4 November 1950 (Joined Cases T-213/95 and T-18/96 SCK and FNK v Commission [1997] ECR II-1739, paragraphs 56 and 57). 33 First, JCB notified the agreements concerning its distribution arrangements on 30 June 1973 and the Commission closed that procedure 27 years later in rejecting, in Article 2 of the contested decision, the request for exemption under Article 81(3) EC made in Second, the procedure initiated following the complaint by Central Parts on 15 February 1996 lasted nearly five years. 34 The Commission disputes the applicability of Article 6(1) of the ECHR to administrative procedures in competition law since that convention is not part of Community law as such (Case T-112/98 Mannesmannröhren-Werke v Commission [2001] ECR II-729, paragraph 59). 35 Moreover, the Commission contends that it did not breach its duty to act within a reasonable time. First, JCB, without ever seeking a formal decision from the Commission, implemented a system of contracts different from that notified in 1973 and did not notify all the agreements, given that the letters sent in 1980 and 1975 did not constitute notifications within the meaning of Regulation No 17. Secondly, the infringement procedure was not excessively long, given the complexity of the file, the checks it required and the fact that changes made at the same time to Community law on dealership agreements caused certain points in the first statement of objections to be reconsidered. Moreover, of the 33 months of the infringement procedure, JCB was responsible for a delay of more than seven months. II-70

16 JCB SERVICE v COMMISSION Findings of the Court 36 The need to act within a reasonable time in conducting administrative proceedings relating to competition policy is a general principle of Community law whose observance is ensured by the Community judicature (Case C-282/95 P Guérin automobiles v Commission [1997] ECR I-1503, paragraphs 36 and 37; Joined Cases C-238/99 P, C-244/99 P, C-245/99 P, C-247/99 P, C-250/99 P to C-252/99 P and C-254/99 P LVM v Commission [2002] ECR I-8375, paragraphs 167 to 171, and SCK and FNK, cited above, paragraphs 55 and 56), and which is incorporated, as an element of the right to good administration, in Article 41(1) of the Charter of fundamental rights of the European Union proclaimed in Nice on 7 December 2000 (OJ 2000 C 364, p. 1). Accordingly, while it is not necessary to rule on the applicability as such of Article 6(1) of the ECHR to administrative proceedings before the Commission relating to competition policy, it must be considered whether, in the present case, the Commission has breached the general principle of Community law that decisions must be adopted within a reasonable time in the procedure leading to the adoption of the contested decision. 37 In considering this plea, a distinction must be made between the two sets of administrative proceedings at issue, namely, first, consideration of the agreements notified in 1973, which was concluded by the rejection, in Article 2 of the contested decision, of the application for exemption, and, second, investigation of the complaint made in 1996, the conclusions of which are set out in the other articles of the operative part of the contested decision relating to the infringement. 38 As regards the proceedings which followed notification in 1973, according to the documents on the file, the Commission filed the notified agreements in 1992 without taking a decision and it was only JCB's reply to the first statement of objections which led the defendant to reconsider those agreements in the course of the investigation of the complaint. It is abundantly clear that the fact that those proceedings lasted 27 years breaches the obligation of the administration to adopt a position and close proceedings, once opened, within a reasonable time. II-71

17 JUDGMENT OF CASE T-67/01 However, regrettable as such a breach is, it cannot have affected either the lawfulness of the rejection of the application for exemption or the proper conduct of the proceedings to establish that there was an infringement. 39 As regards the rejection of an application for exemption, which is a separate decision from that finding that there was an infringement, it is settled case-law that the mere fact of not having been adopted within a reasonable time cannot render unlawful a decision taken by the Commission following notification of an agreement (see, to that effect, Case T-26/99 Trabisco v Commission [2001] ECR II-633, paragraph 52, and Case T-62/99 Sodima v Commission [2001] ECR II-655, paragraph 94). 40 Infringement of the principle that the Commission must act within a reasonable time, if established, would justify the annulment of a decision taken following administrative proceedings in competition matters only in so far as it also constituted an infringement of the rights of defence of the undertakings concerned. Where it has not been established that the undue delay has adversely affected the ability of the undertakings concerned to defend themselves effectively, failure to comply with the principle that the Commission must act within a reasonable time cannot affect the validity of the administrative procedure (see Joined Cases T-305/94 to T-307/94, T-313/94 to T-316/94, T-318/94, T-325/94, T-328/94, T-329/94 and T-335/94 LVM v Commission [1999] ECR II-931, paragraph 122, not overturned on that point by the judgment on appeal of 15 October 2002 in LVM v Commission, cited above, paragraphs 176 and 177). 41 As regards the decision finding an infringement, suffice it to note that care is taken in that decision not to base findings on matters which were notified and to establish that the practices of which JCB is accused are different from those stipulated by the notified agreements. Consequently, the fact that the agreements were notified long ago cannot affect the lawfulness of the infringement proceedings relating to matters other than those notified. II-72

18 JCB SERVICE v COMMISSION 42 Moreover, JCB Service does not argue that the length of time which elapsed resulted in any particular procedural irregularity and confines itself to submitting that the Commission's conduct reveals poor management of the file. No inference of relevance to the consideration of the claims for annulment can therefore be drawn from the length of time which has elapsed since the notifications made in As regards the investigation of the complaint referred to the Commission on 15 February 1996, the total duration of the procedure, 4 years, 10 months and 6 days, does not appear excessive given the complexity of the case, which involves several Member States and covers five heads of infringement, and the need to draw up a second statement of objections, referred to in paragraphs 16 and 18 above. 44 Even if that length of time were held excessive, that finding would be such as to entail the annulment of the relevant articles of the contested decision only if it were established that it gave rise to an infringement of the rights of defence (see the judgment of 20 April 1999 in LVM v Commission, cited above, paragraph 122, not overturned on that point by the judgment of 15 October 2002 in LVM v Commission). 45 However, it must be noted that the applicant does not argue that the Commission's alleged failure to act within a reasonable time in investigating the complaint gave rise, in the present case, to an infringement of the rights of defence. As was confirmed at the hearing, JCB Service confines itself to arguing that the length of the procedure reveals the Commission's partiality and mismanagement of the file and thereby demonstrates the unlawfulness of the contested decision. Against that background, and without it being necessary to rule on the alleged excessive length of the investigation of the complaint, it must be held that the plea as it is argued cannot entail the total or partial annulment of the operative part of the contested decision. II - 73

19 JUDGMENT OF CASE T-67/01 46 It follows from the foregoing observations that the plea, which is not such as to affect the lawfulness of the contested decision, either with regard to the application for exemption or with regard to the infringement, must be rejected as inoperative. The second plea: breach of the principle of the presumption of innocence Arguments of the parties 47 JCB Service submits that the Commission did not allow it a fair hearing and did not observe the principle of the presumption of innocence which applies to the procedures relating to infringements of the competition rules that may result in the imposition of fines on undertakings (Case C-199/92 P Hüls v Commission [1999] ECR I-4287, paragraphs 149 and 150). The Commission thus failed to observe its duty of impartiality, in considering the facts with partiality, failing to take account of evidence in its favour and presuming its guilt, in breach of the principle of the benefit of the doubt (Case T-62/98 Volkswagen v Commission [2000] ECR II-2707, paragraph 269, and the Opinion of Judge Vesterdorf acting as Advocate General in Case T-1/89 Rhône-Poulenc v Commission [1991] ECR II-867, II-869, II-954 and II-956). 48 JCB alleges that the Commission had adopted a negative attitude towards it from the start, without having ascertained whether the distribution agreements had been notified, and then, once it had the complete file before it, had adhered to its original position, presuming the guilt of the undertaking. The applicant takes the view, citing examples in support of that view, that the Commission did not consider, or destroyed, evidence in its favour and misinterpreted the documents and the facts of the case. II-74

20 JCB SERVICE v COMMISSION 49 The Commission contends that the procedure was conducted fairly as JCBamford Excavators was given two hearings and had prior access to the file. The Commission adds that it adopted a second statement of objections because the applicant's written and oral observations led it to examine the 1973 notification thoroughly and reconsider its assessment. The Commission therefore disputes that it acted partially. Findings of the Court 50 The plea is in two parts. The first concerns observance of the right to be heard, which is governed, as regards the application of Articles 81 EC and 82 EC, by the provisions of Article 19(1) of Regulation No 17 and by those of Regulation No 99/63/EEC of the Commission of 25 July 1963 on the hearings provided for in Article 19(1) and (2) of Council Regulation No 17 (OJ, English Special Edition, p. 47). Those provisions require that undertakings concerned by a proceeding for the establishment of infringements are afforded the opportunity, in the course of the administrative procedure, of effectively making known their views on all the objections dealt with in the decision (Case 85/76 Hoffmann-La Roche v Commission [1979] ECR 461, paragraph 9, and SCK and FNK v Commission, cited above, paragraph 65). In the second, the applicant relies on the principle of the presumption of innocence which is part of the Community legal order and applies to the procedures relating to infringements of the competition rules applicable to undertakings that may result in the imposition of fines or periodic penalty payments (Case Hüls v Commission, cited above, paragraphs 149 and 150, and Case C-235/92 P Montecatini v Commission [1999] ECR I-4539, paragraphs 175 and 176). 51 As regards respect for the rights of the defence, as pointed out in paragraphs 16 and 18 above, JCBamford Excavators was given an opportunity to submit its observations and was heard by the Commission following each of the statements of objections. II-75

21 JUDGMENT OF CASE T-67/01 52 The preparation of a second statement of objections was made necessary by the observations made in response to the first statement of objections, which pointed out, in particular, that agreements had been notified. The Commission was obliged to reconsider its objections in the light of those agreements since Article 15(5) of Regulation No 17 prohibited it from imposing a fine on JCB in respect of notified clauses. Far from infringing the right to be heard, reconsideration of the infringement in the light of such new evidence and the adoption of the second statement of objections were intended to correct the original deficiencies in the procedure and the errors of assessment liable to arise as a result (see Case 51/69 Bayer v Commission [1972] ECR 745, paragraph 11). From that point of view, the procedure followed did not show signs of any irregularity or failure to have regard to the rights of the defence. 53 As regards the principle of the presumption of innocence, the mere fact that the Commission adopted two successive statements of objections cannot suffice to establish that that principle was breached. Moreover, a general presumption of the guilt of the undertaking concerned can be attributed to the Commission only if the findings of fact it made in the decision were not supported by the evidence it furnished. 54 As an example of the Commission's alleged partiality, JCB Service mentions, first, a memorandum of 16 May 1995 from the Sales Development Director, sent to the managers of the companies in the group, which states that the prohibition of parallel imports is contrary to the decisions of the Commission and the case-law of the Court of Justice. It alleges that the Commission used that document as evidence that JCB was aware of Community law, which constitutes an aggravating factor. However JCB cannot claim that it was unaware of the requirements of Community competition law, as, moreover, attested by its notification of its agreements as soon as the United Kingdom of Great Britain and Northern Ireland joined the European Community. JCB's concern over the compatibility of its agreements and practices with Community law, which emerges from the memorandum mentioned above, is an objective finding of fact, II-76

22 JCB SERVICE v COMMISSION which is, moreover, not disputed by the applicant. The fact that the Commission has taken account of the document in question and the conduct which it records does not therefore reveal partiality on its part. 55 JCB submits, second, that the Commission misinterpreted the letter of 13 April 1995 from Berkeley JCB to JCB Sales mentioned in recital 89 of the contested decision. That correspondence records the fact that that distributor might be approached 'by both end users and agents'. Even if the Commission had misinterpreted that part of the sentence in stating in recital 143 of the contested decision that Overseas end-users and their duly appointed agents' were referred to, that possible inaccuracy did not in itself demonstrate partiality but, at worst, betrayed a poor understanding of the document. 56 Third, JCB takes the view that, in any event, the Commission assumed its guilt. It complains, for instance, that it did not take account of the judgment of the Cour d'appel de Paris of 8 April 1998, which was in its favour. That judgment, which held that Central Parts used the JCB sign without authorisation and deleted the serial numbers from JCB machines, concluded that Central Parts had engaged in acts of unfair competition against JCB. The Commission also misinterpreted the 'Rouvière dispute', named after a customer of Central Parts, an unauthorised dealer who bought a JCB machine from Central Parts and subsequently repaired it badly. The fact that the author of a complaint in a procedure applying Regulation No 17 might have engaged in misconduct for which it was sentenced by a court is irrelevant to the infringements actually alleged against JCB which are, moreover, separate. 57 JCB Service submits, fourth, that the transcript of the interview held on 6 November 1996 on the premises of the authorised distributor, Wading JCB, II - 77

23 JUDGMENT OF CASE T-67/01 between officials of the 'Competition DG' and the distributor's representatives made by staff of that directorate constituted exculpatory evidence which the Commission was wrong not to take into account. 58 According to the transcript of that interview, which was placed on the court file during these proceedings, as indicated in paragraphs 27, 28 and 30 above, the information given to the Commission by Watling JCB during that interview concerns, inter alia, the way in which restrictions imposed on out-of territory sales were implemented, relations between the applicant and the JCB Dealer Association, service support fees and the drawing up of retail price lists. In the picture of relations between the JCB group and one of its distributors which emerges from that interview, no element can be clearly pinpointed as evidence as to whether or not the practices of the distribution network constitute infringements. It seems, therefore, that it cannot be argued that the Commission excluded the document from its examination of the elements of the infringement in order to suppress exculpatory evidence. Moreover, the Commission states that it excluded that document because it had doubts about the lawfulness of the circumstances in which it was obtained, which seems a plausible explanation here. 59 Accordingly, in the light of the circumstances described above and the content of the transcript in question, the Commission's decision to exclude that document from the file is not sufficient to prove the allegation of partiality made against the Commission in dealing with the case. 60 In conclusion, there is nothing in the conduct of the administrative procedure to indicate that the Commission interpreted the documents and the facts in a tendentious or biased manner or exhibited partiality in its conduct towards JCB. The plea of breach of the principle of the presumption of innocence in consideration of the evidence must therefore be rejected. II-78

24 JCB SERVICE v COMMISSION 61 It follows from the foregoing that the right to be heard and the principle of the presumption of innocence were not breached. The third plea: breach of the right of access to the file Arguments of the parties 62 JCB Service alleges that the Commission disregarded its right to have access to the documents placed on the file which, it argues, were relevant to its defence and were not internal Commission documents which the Commission could declare non-accessible (documents 1 to 19 mentioned in paragraph 24 above). 63 The Commission contends that JCB had access to all the documents on the file which were not confidential. As regards the documents numbered 6 to 10, the Commission points out that it did not use them as evidence of the infringement and that they therefore could not have been of any use to the undertaking's defence. Findings of the Court 64 Access to the file is one of the procedural guarantees intended to safeguard the rights of the defence. Infringement of the right of access to the Commission's file during the procedure prior to adoption of the decision can, in principle, cause the decision to be annulled if the rights of defence of the undertaking concerned have II-79

25 JUDGMENT OF CASE T-67/01 been infringed. In such a case, the infringement committed is not remedied by the mere fact that access was made possible during the court proceedings relating to an action in which annulment of the contested decision is sought. Where access has been granted at that stage, the undertaking concerned does not have to show that, if it had had access to the non-disclosed documents, the Commission decision would have been different in content, but only that it would have been able to use those documents for its defence (judgment of 15 October 2002 in LVM v Commission, paragraphs 316 to 318). 65 In accordance with those principles, it must be considered whether the Commission's refusal to allow JCB access to the documents at issue, which were only disclosed in the course of the court proceedings, prevented the applicant from taking cognisance of documents which were liable to be of use to it in its defence and thereby infringed the rights of the defence. 66 The document numbered 1 by the applicant is a list of JCB's authorised distributors for Benelux, based on an official publication by JCB, which Central Parts disclosed to the Commission in the course of the investigation of its complaint. The information contained in that document, in the form of a simple list of addresses, was clearly familiar to JCB and the applicant does not even allege that its rights were infringed as a result of the failure to disclose that document to it. 67 The documents numbered 2, 11, 12, 13, 14, 15, 16 and 17 are requests for information sent to Central Parts, Gunn JCB and Watling JCB by the Commission in the exercise of its powers of investigation under Article 14 of Regulation No 17. As mere requests for information they contain nothing useful to JCB's defence. The refusal to disclose them thus did not prejudice the rights of the defence. II-80

26 JCB SERVICE v COMMISSION 68 The documents numbered 3, 18 and 19 are replies to the requests for information mentioned in paragraph 67 above, the first under Article 14 and the two others under Article 11 of Regulation No 17. They could compromise the Commission's sources of information. In those circumstances the Commission was entitled to invoke confidentiality and refuse to allow JCB access to those documents on the file during the administrative procedure. 69 Finally, the documents numbered 6, 7, 8, 9 and 10 concern the interview between officials of the 'Competition' DG and representatives of Wading JCB which took place on the premises of Wading JCB on 6 November 1996 (see paragraphs 57 and 58 above). Although it includes witness statements concerning the operation in practice of JCB's distribution network from the point of view of the dealers, that interview cannot be considered to have had the potential to be useful to the defence of the undertaking in question. 70 First, the matters brought to light by those interviewed are all referred to in other documents on the file on which the undertaking was given an opportunity to put its view, whether on out-of-territory sales, relations between the applicant and the JCB Dealer Association, service support fees or the drawing up of retail price lists. As held in paragraph 58 above, the transcript of the interview contains nothing which can be clearly pinpointed as evidence as to whether or not the practices of the distribution network constitute infringements. The contested decision is, moreover, based on those documents and not on the content of the interview, which is precisely what JCB, in this plea, accuses the Commission of not taking into account. 71 Second, the circumstances of the case make it legitimate to assume that JCB was aware, through its distributor, Watling JCB, of the content of the interview before the adoption of the contested decision. In particular, the facts set out in paragraph 4.59 of the application imply that JCB received a copy of the document through Watling JCB before the decision was adopted. Moreover, JCB II-81

27 JUDGMENT OF CASE T-67/01 Service itself accepts that it was informed by Watling JCB of the inspection conducted by the Commission at its premises and the interview recorded on the second day of that inspection. It does not specify when it received that information but, whilst it complains that the Commission did not allow it access to the document, it does not allege that it was unaware of its content during the procedure. 72 It follows from the foregoing that the plea of breach of the right of access to the file and the resulting breach of the rights of the defence must be rejected. 73 Moreover, there is no need to adjudicate on the claims for production of certain documents on the file to which JCB was refused access during the administrative procedure, given that those documents were disclosed in full to the applicant in the course of proceedings before the Court of First Instance. 2. The merits of the contested decision The plea of failure to establish the infringement 74 The Commission identified five counts of infringement of the provisions of Article 81 EC, set out in paragraph 20 above. II-82

28 JCB SERVICE v COMMISSION Preliminary observations of the parties on notification 75 JCB Service submits that, having notified its agreements as long ago as 1973, amended them in the light of the Commission's observations and submitted revised agreements in 1975, and then amendments to them in 1980 and 1995, it was entitled to assume, in the absence of any communication from the administration until the lodging of the complaint by Central Parts in 1996, that its agreements, as amended and, in its view, properly notified, were consistent with Community law and tacitly approved by the Commission. 76 The Commission states that only the distribution agreements properly notified using form A/B on 30 June 1973, relating to all the then Member States of the Community, apart from the French Republic, and the agreements sent on 18 December 1975 amending some of the previous ones, can be considered to have been properly notified. However, the contracts sent in 1980 and 1995, not having been notified using the requisite form A/B, were not, in the defendant's view, validly notified. It points out that Community law and, in particular, Regulation No 17, do not allow the interpretation relied on by JCB Service based on tacit approval or presumption of lawfulness. Findings of the Court 77 The question thus raised by the parties is whether, regardless of the submission in 1975 of agreements amended following the Commission's observations, which the Commission accepts fall within the terms of notification, as indicated in paragraph 76 above, the documents subsequently sent in 1980 and 1995 may be considered to have been properly notified in the light of the requirements of Regulation No 17 and of Regulation No 27 of the Commission of 3 May 1962, First Regulation implementing Council Regulation No 17 (OJ, English Special Edition, , p. 132), as amended by Regulation (EEC) No 1133/68 of the Commission of 26 July 1968 (OJ, English Special Edition, 1968, (II) p. 400), and replaced by Commission Regulation (EC) No 3385/94 of 21 December 1994 on II - 83

29 JUDGMENT OF CASE T-67/01 the form, content and other details of applications and notifications provided for in Council Regulation No 17 (OJ 1994 L 377, p. 28), which entered into force on 1 March The documents sent by JCB in 1980 and 1995 relate to the agreement with the United Kingdom distributors and the question of their lawfulness is likely to be relevant to the examination of the first element of the infringement regarding the restrictions imposed on passive sales by United Kingdom dealers (see paragraphs 86 to 89 below). 79 According to settled case-law, the objects of notification are achieved solely by notification of contracts in identical terms concluded by one and the same undertaking (Case 1/70 Rochas [1970] ECR 515, paragraph 5). The use of that form is therefore mandatory and is an essential prior condition for the validity of the notification (Joined Cases 209/78 to 215/78 and 218/78 Van Landewyck v Commission [1980] ECR 3125, paragraphs 61 and 62), and a fresh notification must be made in the event of any reinforcement or extension of the restrictions and, a fortiori, any introduction of new restrictions (Case C-39/96 Free Record Shop [1997] ECR I-2303, paragraph 15). An undertaking cannot maintain that exclusivity clauses in a notified agreement have expired if it has not notified, in the form required by Regulation No 17, the amendments alleged to have been made (Joined Cases 43/82 and 63/82 VBVB and VBBB v Commission [1984] ECR 19, paragraph 8). It is only in the specific case of renewal of a request for exemption that the Court has held that a mere request for renewal with amendments is sufficient (Case 75/84 Metro v Commission [1986] ECR 3021, paragraphs 29 to 31). so Furthermore, as the Commission is right to observe, on the specific subject of the system of notification provided for by Regulation No 17, Community competition law makes no provision for tacit approval of agreements notified in that way. II-84

30 JCB SERVICE v COMMISSION 81 In the present case, the 1980 agreement contains new clauses concerning, inter alia, intellectual property rights and the procedure to be followed to terminate contractual relationships. It has some additions concerning the obligations of the distributor. Clause 4, which limits the freedom of distributors with regard to wholesale sales, has been amended in the new agreement. In the 1995 version, Clause 4 was rewritten as regards the exceptions to the restrictions imposed on distributors. Further obligations for distributors were also introduced. 82 Given the substantial amendments thus made to its agreements and the new clauses inserted in them, JCB should have notified them using the form provided for that purpose when it sent them in 1980 and 1995, in order to enable the Commission to carry out the review incumbent upon it effectively. Accordingly, only the agreements notified in 1973 and amended in 1975 in response to the Commission's observations must be regarded as properly notified. The first element of the infringement, relating to restrictions on passive sales by distributors in the United Kingdom, Ireland, France and Italy, to unauthorised distributors, end-users or distributors located outside exclusive territories and, in particular, in other Member States Arguments of the parties 83 JCB Service considers that the Commission has not adduced evidence for its claim that restrictions on passive sales had been imposed on authorised distributors in the United Kingdom, Ireland, France and Italy, prohibiting them from exporting even to end-users and authorised distributors outside their exclusive territory, and, in particular, to the other Member States and that the only express prohibition in those agreements concerns sales to unauthorised distributors. The II- 85

31 JUDGMENT OF CASE T-67/01 applicant stresses that most of the documents on which the Commission relies relate to the implementation of Clause 4 of the notified agreements. JCB Service maintains further, that its policy on 'grey exports' was directed at parallel traders outside its network and that the documents mentioned in the contested decision in that regard are not relevant to the establishment of the infringement complained of. 84 The Commission contends that JCB effectively imposed restrictions on the passive out-of-territory sales allocated to each authorised agent, by interfering in the export sales of its distributors in the United Kingdom, by obliging its Italian distributors to sell only within the allocated territory, by making supplies by its Irish distributors outside the allocated territory subject to its approval and by participating, through its French subsidiary, in the negotiation of service support fees in France. The Commission adds that Clause 4 of the notified agreements was implemented in a different and more restrictive way than was provided for by the wording of the notified clause. The defendant also takes the view that JCB actively discouraged all sales abroad whether by its authorised agents or by unauthorised agents in the case of parallel exports. Findings of the Court 85 The element of the infringement described by Article 1(a) of the contested decision concerns a restriction imposed on passive sales by authorised distributors in the United Kingdom, Ireland, France and Italy, prohibiting or deterring them from selling not only to unauthorised distributors, but also to authorised distributors out-of-territory or to end-users. A restriction of that nature, which has as its object and effect the limiting and sharing of markets, is prohibited by Article 81(l)(b) and (c) EC (see Case 86/82 Hasselblad v Commission [1984] ECR 883, paragraph 46). II-86

32 JCB SERVICE v COMMISSION The United Kingdom 86 The notified agreements concerning distributors and main dealers in the United Kingdom (registered under numbers IV and IV respectively) contain, in the version amended in 1975 in response to the Commission's observations, a Clause 4 which provides, as regards distributors, '[t]he distributor hereby agrees not to sell JCB products wholesale for resale except to an approved sub-dealer or in the case of B products to a main dealer', and as regards main dealers, '[t]he main dealer hereby agrees not to sell JCB products wholesale for resale except to an approved sub-dealer'. Those clauses, which lay down a prohibition on selling to unauthorised agents, did not contain a general prohibition on selling to final dealers or to authorised agents outside the territory allocated. The Commission contends that the clause in question has been interpreted as entailing a general prohibition on out-of-territory sales. 87 JCB Service submits that the documents on which the Commission based its conclusion in recitals 143 and 144 of the contested decision that the restrictions were established do not support that conclusion. 88 In that connection, in a letter sent on 26 October 1992 by Watling JCB to the secretary of the Queen's Award Office applying for a Queen's Award for Export Achievements, it expressly states that its distribution agreement prohibits it from selling new machines or parts for export. According to a letter of 13 April 1995 from Berkeley JCB to JCB Sales, that authorised distributor considers itself bound by a clause prohibiting it from selling outside its territory and undertakes to consult JCB in the event of doubtful requests from both end users and agents. In a letter of 21 November 1995, TC Harrison JCB, another authorised distributor, explains to Central Parts that it is not allowed to export. A letter of 30 November 1992 from Gunn JCB to JCB Sales, in which that authorised distributor defends its sale of a new machine in France, confirms that JCB Sales ensures territorial exclusivity is respected by its agents. Those documents all show that the distributors believed that their contract with JCB bound them to restrictive II - 87